Anglo American rejects BHP’s $39 billion takeover proposal

LONDON— Anglo American rejected rival miner BHP Group’s 31.1 billion pound (US$39 billion) takeover proposal on Friday, saying the bid significantly undervalued the London-listed company and its future prospects.

Australia’s BHP, which has until May 22 to make a binding bid, is expected to sweeten its offer to try to clinch a deal that would create the world’s biggest miner of copper, a metal central to the clean energy shift, accounting for about 10 per cent of global output.

Anglo’s London-listed shares were trading 5.7 per cent higher at 27.04 pounds by 1303 GMT. Activist fund Elliott has built a $1 billion position, according to a person with knowledge of the stake, which buoyed the stock.

Anglo said the complex structure of the deal created uncertainty and that it was well-positioned to create significant value from assets aligned with the energy transition and other major demand trends.

The company started a strategic review of its assets in February in response to a 94 per cent fall in annual profit and a series of writedowns caused by lower commodity demand.

The BHP proposal is opportunistic and fails to value Anglo American’s prospects, while significantly diluting the relative value upside participation of Anglo American’s shareholders relative to BHP’s shareholders,” Anglo Chairman Stuart Chambers said in a statement.

BHP’s shares closed 4.6 per cent lower in Australia on Friday. The world’s largest listed mining company on Thursday offered Anglo’s shareholders 25.08 pounds per share, a premium of 31 per cent to Wednesday’s market close.

Copper prices in London hit a two-year peak above $10,000 a metric ton on Friday as fund buying intensified.